They're firing the bureaucracy - more people should do so

What was British Telecom has announced that it’s going to fire lots of people. Ah well, that’s the sort of thing that happens sometimes, right? Well, no, actually, that’s not the right view to take of the company firing 13,000 people. Rather, we should be bemoaning the manner in which this is so difficult, that it’s only ever one under pressure and worse, that it happens far too little. For what is actually happening is that they’re scraping the barnacles off the ship, culling the bureaucracy which inevitably grows in any large organisation.

Alongside full-year earnings which saw the telco’s revenue decline by 1%, BT has announced 13,000 jobs will be heading to the chopping block, while its supply chain has also been lined up for a shake down.

After a torrid 18 months which has seen the business stumble from disaster to scandal and then onto blunder, the team is seeking to save $1.5 billion over the next three years through the changes. Aside from 13,000 job cuts, the majority of which will come from back office and middle-management roles,

Note that they’re going to be hiring 6,000 actual engineers, people who do things, at the same time.

BT has launched its most significant overhaul in a decade after revealing 13,000 managerial and administrative job cuts and a plan to leave its historic home — a stone’s throw from St Paul’s Cathedral in London.

It’s entirely true that an organisation needs some management and some administraive peeps around. Someone’s got to feed the paycheques into the printer after all. But this cull of the bloat is rather over 10% of the entire firm. That’s a lot of deadweight for any organisation to be carrying, don’t you think? Sure, they might not be cutting all the right people, but even so, the idea that they can still operate without 10% of their people is pretty startling, isn’t it?

Well, some don’t think so, obviously:

C: You axe the jobs of 13,000 people in the hopes of keeping yours a bit longer.

If the answer was ‘C’ congratulations! Either you’re already BT CEO Gavin Patterson or you’re on the way to being the boss of another big company in Theresa May’s “Britain that works for everyone”. Sign up for an MBA at the fanciest uni that’ll have you and wait for the headhunters to beat a path to your door.

Which is entirely the wrong way to look at it. Instead we should reach back to that most under-rated of management consultants, C. Northcote Parkinson. Who pointed out that once an organisation gets past being managed internally by the tea lady on a spare afternoon it becomes a bureaucracy. And bureaucracies have one and only one mission, motivation. The perpetuation of the bureaucracy itself.

This means that any organisation will end up being colonised by that most hateful of beasties, the bureaucrat. The one to whom process is more important than outcome. How the biccies are chosen becomes more important than whether there should be a meeting or not. Let alone whether the organisation is actually saving lives at sea – to take a current problem – or feeding the poor, building cars, whatever.

Worstall’s Law, a corollary of the Great Parkinson, is that “all and any organisations will end up being run by those who stay awake in committee.”

At which point we’ve got to decide what to do about it. This markets and capitalism thing having a useful answer. Those who gaze at the organisational navel for a living will bankrupt the organisation, neatly removing it and the bureaucracy from the scene. The part of our society which doesn’t do that is government for of course they can just raid our wallets again for more instead of having to compete.

Adding this all up together tells us something important about public sector management. It should be much more brutal than private sector. For the benefit of us all that is. Sure, government needs to be done and we’ll need people to do it. But it’s an organisation, it’s going to get colonised, just like any other organisation is and will be. In that private sector we’ve got managers like here at BT who try to cut that bureaucracy. But it’s of no great matter to the rest of us if they do or don’t. For failure to cut it means that they’ll go bust and will thus the bureaucracy will be out of our lives anyway. But government bureaucracy doesn’t have that final solution, does it? Therefore it should and must be more brutal at dealing with the barnacles more directly mustn’t it? That ship of state must be careened and scraped more often than private business.

Is that what happens? Is it ‘eck. Quite the opposite in fact, public sector jobs are safer, more difficult to be fired from, than private sector. Which is entirely, completely, the wrong way around.

Which is a bit of a problem in the method of governance, isn’t it?

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Fred
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Fred

BT should have gone all in on mobile and broadband tech years ago. Anyone could see, once mobile took off, that their fixed line effective monopoly wasn’t worth a hill of beans.

Spike
Member

In retrospect, yes. But this means BT should have seen that, before mobile took off. Or else decided to spend resources to play catch-up.

MrYan
Member
MrYan

BT did see mobile coming – they had one of the early mobile networks in the UK (Cellnet) but for some reason decided to hive it off. They then needed to buy EE to get back into the market.

Bloke in North Dorset
Member

The real business is the core and middle mile not the last mile and that’s where they were concentrating. As we move in to deeper 4G concentrations and 5G even more fibre is going to be needed to connect the radio sites, not least because ever more of the processing is centralised and the only equipment at the radio site is RF. Mobile is no longer the cash cow it once was and is desperately fighting to protect its margins as the MNOs become ever closer to being utilities rather than disruptors and their EBITDAs drop accordingly. In hindsight they… Read more »

Spike
Member

(1) BT is not an ordinary business but a protected monopoly franchise that makes it tend to run like a bureaucracy, seeking stasis. (2) A well-run business “right-sizes” all the time, privately, and does not need to do so all-at-once with public announcement. (3) The fact that BT does so might mean it wants not so much to get more efficient than to virtue-signal that it is taking profound action. (4) No company discards its assets, including trusted people who already know the ropes; many of the 6,000 “engineers” might also be among the 13,000 “let go,” perhaps with company-paid… Read more »

Hallowed Be
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Hallowed Be

Oh that’s a nice spot. Very near to where the “first dates” restaurant is. I’m fascinated about the costs v savings of HQ relocations. Moving helps to get rid of deadwood that’s not to be underestimated. You force the various divisions’ hand by saying:we’re going to be here at so and so a date and you can only bring x with you. But wherever you go if its ouside the centre you don’t get the pick of the graduates, or the experienced hires or the best secretaries. Moving out saves money but in the centre you get the cream but… Read more »

Hector Drummond
Member

As far as the public sector goes we need to start again. Completely start again. Sack every single person and start from scratch. About 20 000 people should cover what really needs to be done.

Justin
Member
Justin

Pensions liabilities?